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Employment Law Client Alert: EEOC to Issue New Regulations Impacting Potential Pay Disparity Claims

Feb 2, 2016Employment Law

On January 29, 2016, the Equal Employment Opportunity Commission ("EEOC") announced proposed revisions to the Employee Information Report ("EEO-1"), required to be filed by employers with 100 or more employees. The revisions would compel such employers to include pay data for their employees. Accordingly, in addition to EEO-1 data including workforce profiles from private section employees by race, ethnicity, gender and job category, aggregate data on pay raises and hours worked would be added to the information collected beginning in September 2017. The proposed changes are subject to a sixty (60) day comment period ending on April 1, 2016.

For relevant private employers, concerns have been raised regarding the additional costs and other burdens they will encounter gathering and reporting W-2 pay data to the EEOC. Employers should recognize that this will lead to increased scrutiny, investigation and potential enforcement proceedings regarding alleged pay disparities. Employers should understand that, although the EEO-1 data is confidential, aggregated data is available to the public. Furthermore, EEO-1 reports and statistical compilations are fair game during the course of discovery in employment discrimination actions and it is expected that the information inputted by the employer, as per the new EEOC regulations, may prove very significant in a matter where the wages earned by a particular individual are relevant to a Title VII discrimination claim or in connection with potential class action equal pay lawsuits.

In advance of the September 2017 EEO-1 reporting obligations, it would be wise for employers to self-audit their pay practices as a precautionary measure.